big oil greed is destroying the U.S. economy

NEW YORK (CNNMoney) -- Exxon Mobil reported quarterly earnings of $10.3 billion on Thursday, a surge of 41% from a year earlier.

Why? Higher prices for oil and natural gas.

Profit at the oil company soared compared to the same period a year ago, when it was $7.4 billion. Per-share income climbed to $2.13 per share from $1.44 in the prior year.

And revenue rose to $125.3 billion from $95.3 billion in the year-ago quarter, the company said.

Exxon's (XOM, Fortune 500) stock rose 3% in early trading, but then flattened.

Oil industry competitors also saw stock gains. Chevron Corp (CVX, Fortune 500). rose 2%, while BP PLC (BP) rose less than 1%. Royal Dutch Shell (RDSA) rose less than 1%and Total SA (TOT) jumped 4%.

Exxon's strong performance was still well below its profit of $14.83 billion in the third quarter of 2008. That's a corporate record for quarterly profits.

Today, Exxon's profits are on track to do even better in the fourth quarter, since oil prices have increased more than 13% over the last month.

Oil prices have been volatile, dropping precipitously during the summer. But over the last year, prices have managed an increase of 13%, largely because of increases in October and September.

Exxon was once the oil industry's leading company, until it was overtaken by Shell last year.

Chevron is scheduled to report third-quarter earnings on Friday. The company is expected to announce revenues of nearly $70 billion, an increase of 40% from a year ago, and net income of $6.7 billion.

The last time gas was $4.00 per gallon in 2006, oil was $150.00 a barrel. Today gas is $4.00 a gallon and oil is only $100.00 a barrel. Because of the price of gas, most people have to cut back on everything else, from travel to vacations to food and clothing. It's big oil companies and Wall Street speculators that are the cause of high gas prices, not Obama. And anybody that believes that Romney will give us $2.50 a gallon gas as POTUS probably already gave all their money to Madoff.

 

It's inflation that leads to a rise in the dollar price of gas. If anything, the price of gas is lower than ever, but as the dollar is debased and the rest of the world debases their currencies to keep the dollar from being too weak, the price that you pay goes up. You can thank your government and it's central bank for devaluing your paycheck.

Speculators are saving you, not hurting you. Buy betting on higher prices in the future, they soften the demand for gasoline and keep the prices from spiking.

 

I don't follow the logic, is the accusation that O&G companies are artificially inflating prices? Their just as beholden to market forces and competition as anyone else, unless your going to augment your case with a dash of collusion.

The rise in the price of fuel is not hard to sort out. A weakened dollar, increased/inelastic demand and stagnant supply.

You've simply thrown out some revenue numbers and tried to make a correlation between that and the increase in price/gallon, there's really no argument here, just numbers and a baseless conclusion.

 

No. It's the oil companies profits. Big oil is making $100 billion per year in profits, plus getting subsidies from the government. And the republicans, along with big oil companies are blaming Obama for the high gas prices. They are doing this in order to pressure the administration into letting them destroy the oceans and the Alaskan wilderness with their oil drilling. Even if oil drilling was totally deregulated, that oil wouldn't be at the gas pump for at least ten years. And it wouldn't lower our dependance on foreign oil. On top of all that, the oil companies are destroying the U.S. water supply with "FRACKING". Peoples tap water is actually igniting on fire! You can live without oil, but you can't live without water! The only solution to future energy is alternative energy. Without it, the economies of the world WILL collapse. U.S. consumption of 20 million barrels per day is unsustainable. China consumes 10 million per day, and that's gonna go up by a lot. Then there's Europe, Russia, India, and the rest of the worlds consumption. peak oil has already been reached, it's a finite resource. Waiting until it runs out before developing alternative energy is a prescription for chaos. Wall Street greed gave us the worst economy since the Great Depression. Big oil greed will make that look like a picnic.

 

Oil production has reached a limit of around 75million barrels a day. New oil production is only replacing declines in older fields. Demand increases can no longer be met through increased production.

There is no more elasticity in the oil markets. This is the simple economics of supply and demand of a commodity at the margin. Any small increase in demand will create a scarcity that cannot be met by increased production so prices will sky rocket as consumers bid up prices as they fight over the last drop.

in any case, the problem of high gasoline prices in the US is not the price of crude oil, there is an oversupply of crude oil in the US right now. The problem is a refinery squeeze. The number of refineries in the US has fallen drastically over the last few decades and there is now little surplus refinery capacity. The recent closure of three of the largest refineries in the US for "routine maintenance" has created a shortage of gasoline in the US. Traders desperate to secure supplies for their client retailers have no choice but to pay whatever price is offered. Market speculators can bid prices even higher secure in the knowledge that desperate users will pay whatever they must.

New drilling will not fix the refinery bottleneck. KeystoneXL will not bring lower gasoline prices.

In a market at capacity a producer can significantly increase their profit by reducing the supply marginally. Enron made billions manipulating California's electricity supply market at the margins, closing generating plants and transmission facilities for "routine maintenance" at times of high demand, etc etc.

 

It's the dollar, not oil.

Oil is up just as much as any other commodity since 1999. 850%

Steel is up 1100%
Silver 900%
Palladium 800%
Gold 600%

etc.

 

Profit margins for US oil companies remain steady at 6 to 8 percent..

Peak oil was a political ploy in the late 1950s and early 1960s.. that was revived by Matthew Simmons (an energy broker) just in time for the war on Iraq.

 

If NFL fans quit going to the games the ticket prices would come down. If fliers quit going to the airports the anal cavity searches would stop. If the working American public car pooled there would be five times less traffic and prices would come down. And if a frog a tail he wouldn't bump his but.

 

And if the government stopped printing and loaning money into existence, the dollar would strengthen.

 

LOLOL..

You don't understand the oil business.. The PPB has to exceed exploration and lift costs.

 

I sell a product and I want a 10 % premium. If my raw material cost, labor and utilities total $1, I sell the product for $1.10. If my raw material, labor and utilities cost $2, I sell the product for $2.20 to attain a 10 % premium. The net profit margin is identical (10 %). The reported revenue has increased from $0.10 to $0.20 for each unit sold. If the number of units sold remains constant, my revenue will increase dramatically. This is elementary business theory. Your interest in lowering costs through communistic big government should be applied to all businesses (i.e. Apple should charge 20 % less, plastic surgeons should run businesses at cost). See how many people show up to work in the USA.

 

Cost-plus pricing leads to an understanding of the market as inherently unstable, with market concentration ensuring the possibility of collapse and therefore the need for significant government interventionism

 

In the oil business you have to also factor in capital investment.. quality, flow rates, market demand...

 

You're not saying anything relevant to my point. The fellow referred to cost-pkus pricing; a primary source of instability that harms the competitive sector (i.e. entrepreneurship)

 

I always find it amusing to try and decipher your posts' hop-scotch logic, projection, and lack of commentary.

It makes me feel like a recovered heroin addict watching someone over-dose who locked themselves in a sound-proof room with one-way windows.

Wish I could help but you made it so I cant.

 

Keep away from economics; your ideology would fall apart

 

If you can't explain it, you probably don't understand it.

Ben Bernanke. Case and point.

 

Its a bit obvious really. Consider the consequences of an economic shock that significantly reduces demand. With cost-plus pricing the impact is an increase in prices, leading to the phenomena of stagflation (and even greater harm to the competitive sector characterised by standard supply/demand criteria).

Don't think too hard though! Your ideology wouldn't survive

 

We're much more likely to run into staglflation because of backwardation caused by fractional reserve lending and the resulting shortages in commodities due to low prices.

In fact without cost-plus pricing no companies would ever grow. That means no capital incentive to innovate or invest. The neo-classical worldview is too inorganic to be of any use.

 

You really should quit trying to convince others of what you think they don't know, it makes you look like a republican. I was in Seismographic exploration (that's looking for oil) for 15 years. Big oil profits are $100 billion per year. That's after all exploration, refining costs and operating costs. Making a profit is just capitalism. Economically destroying your own country is like using your kitchen for a toilet.

 

I know what Seismographers do.. Ever heard of ARAMCO?

Profits for US oil companies are about volume NOT profit margins.

I was a Republican for 35 years.

 

I think you're going to have to show that O&G companies haven't ALWAYS colluded. And now they are colluding to export gas to keep prices from falling in the U.S.

 

Gas prices are lower than ever if you take the dollar out of the equation. High gas prices are entirely, once again, the gov't's fault for printing too much money. As are the record high prices of ALL commodities.

And it wouldn't be as cheap as it is unless companies made a profit, and thus were able to find investors and innovate new cheaper ways of producing gasoline.

 

Greed in general is getting bad.. when people want everything and the lower classes suffer it eventually leads to revolution. Why cant people just be happy with a ridiculous amount of money, why do they always want more and more.

on topic fun question-
How much taxes did exon mobile pay in 2009? what do they pay now?

 

That is nonsense. Its through entrepreneurial activity and then eliminating managerial excess resources that we see company growth. Cost-plus pricing is certainly a market failure in capitalism